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BBA Economic Digest: Mission, Vision and Value

Mission, Vision and Value

In these trying times, remembering the mission, vision, and values becomes a strategic action in itself for economic development organizations. For an EDO to be effective, it is essential to reinforce commitment, responsibility and the willingness to cooperate in a better way. I'm a huge fan of Peter Drucker's management philosophy. Drucker, called the father of modern management, developed the concept of management by objective, which I think all EDOs should embrace.

It requires an honest, sometimes painful self-assessments, based on five simple questions. When advising EDOs on strategic plans, they are among the first questions that I ask. 1. What is our mission? 2. Who is our customer? 3. What does the customer value? 4. What are our results? 5. What is our plan going forward? You would be surprised by the different answers that I get from stakeholders within the same organization on just the question of mission. When principal stakeholders -- staff and board members -- are not on agreement on something as fundamental as mission, the course will be erratic at best. Sustaining the mission, vision and values and sharing them within the entire organization will provoke greater involvement. It's a challenge for all organizations and not just EDOs.

Your core mission provides guidance, not just about what to do, but also what not to do. Do not do what does not fit.

Where We Are

The labor market continues to recover even as coronavirus cases surge— though it's still millions of jobs short of the pre-pandemic level. The problem is that the rate of recovery is slowing significantly. The U.S. economy added 245,000 jobs in November, while the unemployment rate fell to 6.7 percent from 6.9 percent, the government said on Friday. Economists surveyed by Dow Jones had been looking for 440,000 new jobs.

The entire report was, as Chicago Fed President Charles Evans put it, “a little disappointing.”

The restaurant industry lost jobs for the first time since April. The sector’s unemployment rate stands much higher than the national average, at 13.8 percent. 9.8 million fewer Americans remain employed than before the pandemic. And the hard-hit hospitality industry alone accounts for 3.4 million of them.

President-elect Joe Biden called it a “grim jobs report. It shows an economy that is stalling.”

More than 1 million people a week are still filing for initial jobless claims, including nearly 300,000 applying for pandemic assistance.

About 20.2 million Americans are receiving unemployment benefits of some kind, including more than 13.4 million on the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs that were created as part of the CARES Act and end on Dec. 26. The 4.6 million people receiving benefits through PEUC have been unemployed for at least six months and economists estimate that only about 2.9 million will be eligible for the extended benefits program.

Shrinking Labor Market

The U.S. labor force is 2.2 percent smaller than in February, a loss of 3.7 million workers. The labor-force participation rate, or the share of Americans 16 years and overworking or seeking work, is near its lowest since the 1970s when far fewer women were in the workforce. That poses a problem: The supply of workers and their productivity are the building blocks of economic growth. A smaller labor force leaves fewer workers, restraining the economy’s long-term prospects, the WSJ reports. The labor-force participation rate was 61.7 percent in October, down from 63.4 percent in February.

Covid-19 Update

The CDC is advising "universal mask use" outside the home to combat spiraling coronavirus infections, the first time it’s issuing such guidance. Joe Biden said this week he’d ask Americans to wear a mask for his first 100 days as president.

Robert Redfield, President Trump's CDC director, said last week that December through February will "be the most difficult time in the public health history of this nation."

U.S. deaths, now at 279,000, are forecast to pass 500,000 during Biden's first 100 days, even with a rapid vaccine rollout.

Dr. Anthony Fauci predicted that the overwhelming majority of Americans could be inoculated against Covid-19 by the second quarter of next year, leading to herd immunity by the fall.

A Grim Winter for Small Business

Before the pandemic, I would occasionally frequent a small craft brewery near my home to enjoy the beer and invariably good conversation. The vibe was quite different from a bar. It was after all a craft brewery. There are about 8,300 independent breweries in the U.S. Most are small-producing microbreweries and brewpubs, which thrive off of their on-premise beer sales.

To say these are desperate times for small craft brewers and small businesses, in general, is an understatement. Recent data shows the economic recovery is floundering, as coronavirus cases surge and states tighten up restrictions ahead of what is likely to be a grim winter for many small businesses.

Desperate Measures

Last month, a survey from Goldman Sachs found that 52 percent of small business owners had stopped paying themselves in a bid to keep their businesses afloat, while 42 percent had already begun laying off employees or cutting worker pay. Thirty-eight percent said they would have to lay off more employees or cut employee compensation without additional help from Congress, and 20 percent said they would not be able to pay their commercial rent through the end of the year.

With increasing restrictions and cold weather muzzling outdoor consumption, about one-four of small craft brewers say they are not confident they will still be operating this time next year, says Bob Pease, president of the Brewers Association. "It's very important we get the word out about the challenges these breweries are facing and remind consumers these businesses are part of the local economic fabric, they hire and employ your friends and your neighbors," Pease told USA Today.

A third of all small businesses in New Jersey have closed down in 2020, according to a report from The Star-Ledger newspaper. Harvard-based data project estimated that 31 percent of businesses have closed down so far as of Nov. 9. This number is just above the national average estimated by the website. The New Jersey Business & Industry Association reported similar numbers, estimating 28 percent of businesses had closed down by October.

Closer to home, I look forward to the day when I can raise my glass again at my local craft brewery ... if it survives.

Is Compassionate Capitalism Real?

Some question the wisdom of corporate America in even attempting to make this world a better place. I don't get that logic at all. They subscribe to Milton Friedman's belief that companies only concern should be making money for shareholders and all else be damned. Fortunately, many of the nation's top CEOs don't think that way. They realize that their companies have responsibilities to their employees, to the communities from where they operate, and to customers and suppliers. There has been in fact a recent shift in capitalism that can and will sustain it. Just as there are proponents of "compassionate conservatism," I believe in "compassionate capitalism." An example: JPMorgan Chase is committing an additional $30 billion to advance racial equity, which will include affordable housing and homeownership, minority-owned businesses, financial health and workforce diversity. The company (and I could list many others) realizes that it can make a difference, that there is a role for business for the betterment of society. And yet the deniers remain quite vocal in their opposition.

A Lesson in Resilience

Japan is home to more than 33,000 with at least 100 years of history — over 40 percent of the world’s total. Over 3,100 have been running for at least two centuries. Around 140 have existed for more than 500 years. And at least 19 claim to have been continuously operating since the first millennium. A 1,020-year old mochi shop in Kyoto offers a lesson in resilience. Naomi Hasegawa’s family started the business to provide refreshments to weary travelers to pray for pandemic relief — in the year 1000. Like many businesses in Japan, her family’s shop puts tradition and stability over profit and growth. It has weathered wars, plagues, natural disasters, and the rise and fall of empires. And through it all, its rice flour cakes have remained the same. “If you look at the economics textbooks, enterprises are supposed to be maximizing profits, scaling up their size, market share, and growth rate. But these companies’ operating principles are completely different,” said Kenji Matsuoka, a professor emeritus of business at Ryukoku University in Kyoto. “Their No. 1 priority is carrying on,” he told The New York Times. “Each generation is like a runner in a relay race. What’s important is passing the baton.”

Forget the Sale, Focus on the Relationship

Everybody who has been on LinkedIn has probably received a cold sales pitch through LinkedIn messenger. Typically, it comes from someone who you’ve either recently connected with, or who is requesting to connect with you. And then they hit you up. A common tactic these days is when someone makes a note in the invitation about noticing your profile and wanting to be connected, then makes a sales pitch through messenger as soon as the invitation is accepted. I make a point of removing every person who does this from my connections list. Trying to sell to people who don’t even know can make them distrustful of your entire organization. My suggestion: Don't do it.

Rather, provide content that gives true value. That's how you will distinguish yourself from the competition. When you focus on customer-centric content, you'll be far more successful at establishing relationships or authentic rapport. And that's where it starts, not by trying to make a sale but rather making a fan.

With No Fine Print

Last week, I spoke to another class at the University of Oklahoma's Economic Development Institute. My topic: The digital divide and how inequality costs us all dearly.

Last month, I spoke on this to a business retention and expansion class being taught by Erik Collins. This past week, I spoke to a BR&E class taught by Laith Wardi. Both are friends and truly know their stuff.

Economic development is about creating opportunities, changing lives. When technology, particularly digital innovation, fails to do that, it not only generates fear of being left behind, but it actually does leave a vast number of Americans and entire communities behind.

If you don't invest in the human resources of your community, preferably through public/private partnerships, you lose, plain and simple. And yet, we continue to fail on that front.

If you want or need a speaker for your virtual event, I'll give you a Black Friday/Cyber Monday or whatever-you-want-to-call-it deal with no fine print.

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